Digital Currency is a “Fallacy” says Bank of Finland

The Bank of Finland released a report on June 21 explaining why they believe the concept of digital currency is a fallacy; the title of the report released is “The Great Illusion of Cryptocurrencies.”

The paper was written by Aleksi Grym, Adviser on Digitalization and Head of the Digital Central Bank process in the Financial Stability and Statistics Department. The paper explains the fundamentals of cryptocurrencies, and “how poorly understood the concept of money itself still is today” and how the Internet and social media have “muddled our sense of fact and fiction.”

Grym said that cryptocurrencies are not real but rather an “accounting systems for non-existent assets.” He then made an argument that digital ledger technologies like blockchain are the same as the other record keeping system, and the implementation of crypto is “unrelated to the fundamental characteristics of money:”

The article cites several studies portraying bitcoin and cryptocurrencies in a negative light. It describes it at speculative as a bubble with zero fundamental value.

Then Grym asks an question, “What is money?” he noted the definition of money has changed over the years but it is always defined as a unit of exchange and having a store value and a unit of account. And in the report, it said that if money means cryptocurrency, it is not created “out of thin air” and then said that it comes from liquidity transformation.

The report also highlights the main incentive for buying cryptocurrencies are just for criminal activities, security against real or imagined state of oppression, making a sense of community, and just the thrill of trading. Grym also pointed out a comparison between buying an intangible value like Bitcoin, as compared to people buying toys, firearm, or a membership card.

During the dip of cryptocurrencies last week, Cointelegraph published an overview of all articles that promotes “FUD” (Fear, Uncertainty, Doubt) on all crypto space since bitcoin’s inception. There were a lot written about the “tulip mania” and the multiple “death” of bitcoin.